Can Ontario prove basic income works?
For Ontarians who receive social assistance, basic annual income is a promising solution to alleviate the impact of poverty on their health. A pilot program is being proposed by the Ontario provincial government for April 2017, which would select sites in southern Ontario, northern Ontario, and First Nations communities. Under that program, a cash transfer would be given by the government to people who make less than a certain amount.
The sites for the pilot have yet to be determined, and the Ontario government is seeking input on where and how the pilot is conducted from a community survey until January 31, 2017. Public participation in the survey is vital and will play a key role in the selection of test sites that can help generate meaningful, much-needed evidence regarding basic income.
How basic income would work in Ontario
In November 2016, approximately 437,774 people received financial support from Ontario Works. But that program, which provides $8,472 a year to participants, is not enough to alleviate the burden of poverty on individuals. A basic income would act as a “negative income tax,” automatically topping up individuals who fall below 75 percent of the low-income measure. It would provide $1,320 a month, or $16,989 annually, to single adults, with an additional $500 a month for disability.
That additional money would help solve one of the most frustrating problems in health: that health care is influenced by more than access to healthcare or medicine. Social and economic factors, known as the social determinants of health, are also crucial, and income is one of the biggest influences of the social determinants of health.
Hamilton is a good example—a city with a prominent medical school, excellent hospitals, and renowned physicians and researchers. Yet people who live in some very poor parts of Hamilton die, on average, 21 years earlier than those living in wealthier neighbourhoods.
The poorest neighbourhoods in Hamilton have the most visits to the emergency department. Across Canada, suicide rates in the lowest income neighbourhoods are almost twice as high as they are in the wealthiest neighborhoods. Studies also show that diabetes and heart attacks are far more common among low-income Canadians.
And health professionals see their patients struggle to afford to travel to their appointments, let alone to purchase the costly medications prescribed.
The evidence supporting basic income
It makes sense, in theory, that basic income would alleviate these problems. But evidence supporting its implementation is scarce. Findings from a pilot in the United States in the 1970s found positive impacts on the education system, nutritional adequacy and prevalence of low birth weight. Likewise, in Brazil, education, economic activity and criminal violence were positively impacted by a municipal basic income program in Sao Paulo.
A guaranteed income project was also piloted in Dauphin, Manitoba, in the early 1970s, as part of the MINCOME study. All 12,500 individuals living in and around Dauphin were eligible for MINCOME if they met the income test. Following the introduction of a basic income in Dauphin, hospitalization rates fell by 8.5 percent. The cause for this decline? Fewer accidents and injuries and mental health diagnoses.
A basic income also offers stability and predictability so that sudden illness, disability or unpredictable economic events will not be financially devastating. This reduced risk was found to benefit everyone in Dauphin, including families that never collected any payments but who may have benefited from “spill-over effects.”
Based on the findings of MINCOME, we estimated that a basic income would save the health system of Ontario $1.5 billion annually just in a reduction of preventable hospital admissions linked to poverty.
Those against a basic income believe that it discourages people from working; however, MINCOME found this was untrue, except for adolescents, who were more likely to complete high school when anticipated family income was buoyed by MINCOME stipends.
In fact, former senator Hugh Segal recently noted that 70 percent of individuals below the poverty line are employed. Furthermore, a 2008 economic analysis of the burden of poverty on Ontario estimated that between $32.2 billion and $38.3 billion was lost annually as a result of the negative impact of poverty on economic output.
So while basic income holds promise, we need evidence from the Ontario pilot projects to have enough information to prescribe basic income as a solution. But communities stricken by the effects of poverty may be unaware of the government’s survey, which could be the catalyst for an innovative poverty reduction strategy in their own backyard.
Health professionals and researchers, including anti-poverty advocates such as ourselves, may also be unaware of it. As the provincial government has not widely advertised it, we anticipate less than ideal response rates, bias in those who complete the survey, and underrepresentation from those whose input is valuable.
Those struggling from the negative impacts of poverty may be less likely to have their voices heard in this survey, and the test sites may be areas where poverty is less prevalent. For example, although St. Catharines is impacted by poverty, it is a larger municipality where residents can access more resources and supports than the nearby isolated town of Port Colborne, where 63 percent of households spend more than 30 percent of their income on rent, and nearly 600 households are on a waiting list for affordable housing.
Current and future health professionals should support the design and implementation of this basic income pilot by completing the survey or participating in a consultation. Successful piloting of basic income in Ontario communities can lead to a well-needed evidence base to support this as an anti-poverty and public health strategy.
Rahat Hossain is a medical student in the Michael G. DeGroote School of Medicine at McMaster University. Allison Brown is a research coordinator in the Michael G. DeGroote School of Medicine and graduate student in the Department of Health Research Methodology, Evidence & Impact at McMaster University, who is on Twitter @allison_rants.